Taylor Morrison Home (NYSE:TMHC) Shares Gap Up - Here's Why

Key Points

• Berkshire Hathaway agreed to acquire Taylor Morrison Home for $72.50 per share in cash, valuing the company at about $8.5 billion and sending the stock sharply higher.
• The offer represents roughly a 24% premium to the prior close and appears to reflect Berkshire’s confidence in the U.S. housing market, boosting sentiment across the homebuilding sector.
• Before the deal news, Taylor Morrison had just reported stronger-than-expected quarterly results, with EPS of $1.12 topping estimates and revenue of $1.39 billion also beating forecasts.

Taylor Morrison Home Corporation (NYSE:TMHC - Get Free Report) gapped up prior to trading on Monday . The stock had previously closed at $58.50, but opened at $71.57. Taylor Morrison Home shares last traded at $71.5650, with a volume of 4,655,753 shares trading hands.

Trending Headlines about Taylor Morrison Home

Here are the key news stories impacting Taylor Morrison Home this week:

• Positive Sentiment: Berkshire Hathaway agreed to acquire Taylor Morrison Home Corporation for $72.50 per share in cash, valuing the deal at about $8.5 billion in enterprise value and representing roughly a 24% premium to the prior close. PR Newswire: Berkshire Hathaway to Acquire Taylor Morrison Home Corporation for $8.5 Billion
• Positive Sentiment: The deal signals strong confidence from Berkshire Hathaway in the U.S. housing market and marks one of the first major strategic moves under CEO Greg Abel, which may boost investor sentiment across the sector. CNBC: Berkshire Hathaway makes $6.8 billion housing bet with Taylor Morrison deal

Analysts Set New Price Targets

Several research firms have weighed in on TMHC. Zacks Research raised Taylor Morrison Home from a "strong sell" rating to a "hold" rating in a report on Wednesday, April 22nd. Bank of America decreased their price objective on shares of Taylor Morrison Home from $72.00 to $68.00 and set a "neutral" rating on the stock in a research report on Monday, April 20th. Royal Bank Of Canada increased their price objective on shares of Taylor Morrison Home from $69.00 to $72.50 and gave the company an "outperform" rating in a research note on Monday. Wolfe Research restated an "outperform" rating and set a $76.00 target price on shares of Taylor Morrison Home in a report on Thursday, April 23rd. Finally, Barclays lifted their target price on shares of Taylor Morrison Home from $68.00 to $69.00 and gave the stock an "overweight" rating in a research report on Thursday, April 23rd. Six investment analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, Taylor Morrison Home presently has a consensus rating of "Moderate Buy" and a consensus target price of $76.86.

Taylor Morrison Home Stock Up 22.5%

The company has a market cap of $6.69 billion, a PE ratio of 10.69, a P/E/G ratio of 1.35 and a beta of 1.47. The firm has a 50-day simple moving average of $59.11 and a two-hundred day simple moving average of $61.15. The company has a debt-to-equity ratio of 0.37, a current ratio of 7.66 and a quick ratio of 1.45.

Taylor Morrison Home (NYSE:TMHC - Get Free Report) last posted its quarterly earnings data on Wednesday, April 22nd. The construction company reported $1.12 EPS for the quarter, beating analysts' consensus estimates of $0.82 by $0.30. The business had revenue of $1.39 billion for the quarter, compared to analyst estimates of $1.33 billion. Taylor Morrison Home had a return on equity of 11.48% and a net margin of 8.77%.The business's revenue for the quarter was down 26.8% compared to the same quarter last year. During the same quarter last year, the company earned $2.07 earnings per share. Research analysts anticipate that Taylor Morrison Home Corporation will post 5.36 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Taylor Morrison Home

A number of hedge funds and other institutional investors have recently modified their holdings of TMHC. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its position in Taylor Morrison Home by 5.8% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 299,888 shares of the construction company's stock worth $18,005,000 after acquiring an additional 16,379 shares during the last quarter. Northwestern Mutual Wealth Management Co. raised its holdings in Taylor Morrison Home by 30.7% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 899 shares of the construction company's stock valued at $55,000 after acquiring an additional 211 shares during the last quarter. M&T Bank Corp purchased a new position in shares of Taylor Morrison Home during the 2nd quarter worth $262,000. EverSource Wealth Advisors LLC boosted its holdings in shares of Taylor Morrison Home by 406.8% during the second quarter. EverSource Wealth Advisors LLC now owns 897 shares of the construction company's stock worth $55,000 after purchasing an additional 720 shares during the last quarter. Finally, Marshall Wace LLP boosted its holdings in shares of Taylor Morrison Home by 12.0% during the second quarter. Marshall Wace LLP now owns 8,029 shares of the construction company's stock worth $493,000 after purchasing an additional 859 shares during the last quarter. 95.16% of the stock is currently owned by hedge funds and other institutional investors.

About Taylor Morrison Home

Taylor Morrison Home Corporation NYSE: TMHC is a leading national homebuilder and developer specializing in the design, construction and sale of single-family detached and attached homes. The company's portfolio spans entry-level, first-time, move-up and active-adult segments, offering buyers a diverse array of architectural styles, floor plans and personalized design options. Through its vertically integrated model, Taylor Morrison manages land acquisition, community development, construction and sales to deliver quality homes and customer-focused experiences across its markets.

The company's heritage traces back to Morrison Homes, founded in 1977, and Taylor Woodrow, established in 1921 in the United Kingdom.

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